Fed missed chance to curb dividends, say ex-supervisors
Instead, changes to stress capital buffer and TLAC rules would allow larger payouts
Former supervisors say US prudential regulators have missed an opportunity to follow their European counterparts and ensure banks have more capital to deploy during the Covid-19 crisis by curbing dividend payments.
Instead, the US Federal Reserve passed an interim final rule on March 17 amending the new stress capital buffer (SCB), which will potentially increase the size of dividends banks can pay in the future. Sheila Bair, former chair of the Federal Deposit Insurance Corporation, tells Risk
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